International retail giants feel Aussie dollar’s pinch but domestic retailers rise to challenge
A fall in the Australian dollar may be hurting offshore online retailers but it seems to have coincided with online domestic retailers pulling their own weight, experts say.
The comments come after reports international retailer ASOS’ local sales in Australiahave dropped in recent times because of a falling Australian dollar.
NAB chief economist Alan Oster told SmartCompany economists had been saying for some time international online retailers had been growing slower than domestic ones, who were increasingly competitive in the online space.
The Retail Doctor Group’s Brian Walker told SmartCompany he agreed the Australian currency was playing a part but felt ASOS was competing in an increasingly mature online retail market.
“When ASOS opened in Australia, Australians had a great appetite for international fashion and there were many key advocates of ASOS,” Walker says.
“Many still are, but increasingly there is a movement back to (physical) stores that is playing a part.”
Walker says large global online retailers such as ASOS had a “very strong focus” on discounting because they didn’t have the physical environment to create the shopping experience.
“I think ASOS are caught up in the maturing momentum of online only retail,” he says.
Walker says for this reason the domestic market should be prepared to see big online retailers enter physical stores in times to come.
“Don’t be surprised to see ASOS open stores soon,” he says.
National Online Retail Association’s Paul Greenberg told SmartCompany the movement in the Australian dollar is likely doing domestic retailers a favour.
“Traditionally when the Aussie dollar is very strong consumers focus on global shopping, when the dollar is week the inverse is true,” Greenberg says.
But Greenberg says he thinks the evening of the playing field is likely less about currency and more about what local retailers are doing to meet or exceed what the international retailers were doing.
“Domestic retailers are really focused on winning back online shoppers,” he says.
“The meat in the sandwich is we’ve worked hard in the industry to do better.”
Greenberg is cautious about being critical of such a popular online retailer such as ASOS, which he says is a global brand doing really well and in many ways an example for smaller businesses.
“They’ve showed us the way, we should not be parochial as retailers, we should learn from big local players,” he says.
Greenberg says the current climate opened up lots of export opportunities for small domestic retailers.
“Personally I’d love to see more Australian retailers selling globally,” he says.